Coronavirus / COVID-19 Stimulus / Economic Developments

Trump Stops Foreclosures, Restarts Consumer Cashflow – Reassures America

TrumpWe are not there yet, but we are getting there. Critics abound – as they will – but President Trump is working tirelessly to relieve stress for every American in the shadow of Covid-19.

Trump’s two most significant moves so far; beyond accelerating medical response, activating military assets, and expanding commercial liquidity – are offering immediate relief to homeowners by preventing foreclosures, and pioneering cash payments to families, preventing bankruptcies.

On foreclosures, Trump used his emergency executive powers to literally suspend – that is, to stop cold – all home foreclosures and evictions for the next 60 days.

On March 18th, at President Trump’s direction, the Department of Housing and Urban Development (HUD) “authorized the Federal Housing Administration (FHA) to implement an immediate foreclosure and eviction moratorium for single-family homeowners with FHA-insured mortgages for the next 60 days.”

As described by HUD, “these moratoriums are part of the continued effort by President Trump to address impacts to the financial well-being of America’s individuals, families, and businesses caused by … COVID-19.” This will be a major relief to many Americans.

The goal, as Secretary Ben Carson reaffirmed, was to “allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes,” “help steady markets,” and offer “peace of mind” to worried American homeowners.

That single act is highly consequential. Here is why. Roughly 64 percent of Americans own where they live. For most, a monthly mortgage payment represents 28 percent of their take-home pay. With layoffs occurring in larger numbers, many homeowners are affected.

Looking at all 50 states, home foreclosures begin in as little as one month after non-payment (i.e., Alabama), or long as ten months (i.e., Maine, Wisconsin, and New Jersey), with most commencing two or three months after non-payment. Accordingly, a two-month respite is huge.

Separately, the President is seeking direct cash payments to Americans, as large as $1000 per adult and $500 per child within three weeks, with the possibility of follow-on payments.

One may ask – why this swift executive action? Why payments directly to individuals and families, even as the President seeks to assure commercial credit, accelerate the medical response, and give businesses loans and other support?

The answer is simple. It is less political than humanitarian, and economic good sense. The President and White House team know individuals and families count more than statistics. People need peace of mind, food on the table, relief from unnecessary stress – in a crisis not of their making. If there were ever a sign of empathy for individuals and families, these acts are it.

Consumers are the first line of defense against sustained economic downturns. Moreover, restoring consumer confidence and spending is the only way you emerge from an economic shock or prolonged recession. It all comes down to the consumer.

The healthcare side of COVID-19 must be addressed vigorously, professionally, and civically. We are all part of the solution, a high purpose – not small. Businesses need reassurance, loans, waivers, forgiveness, and support to keep service, inventories, sales, and payrolls alive.

But the empirical truth is bigger – and hard to ignore. The entire purpose of our society – the sustaining force of a republic – is the individual. Moreover, the family unit is the centerpiece of stability, confidence, commerce, social norms, values, and our collective standard of living.

Trump knows this intuitively. He reacted swiftly to assuage public fears. He is assuring all that he is with us, knows our pain points, is working to protect individuals and families.

By encouraging and reinforcing Americans to help Americans, he is genuinely sidelining politics. That is the right thing. He is helping our nation – one person and family at a time – to persevere, take heart, sustain our way of life, overcome this invisible adversary, and again thrive.

Preventing foreclosures, and assuring consumers cashflow in crisis, is precisely what good leadership looks like. We are not over this – not yet. But we will get there. We are on our way to a new day – and these presidential efforts make clear that we are not alone.

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